Month: October 2018

Like a magazine, a conference is typically a three-way relationship between content, participants, and advertisers, with the producer/organizer in the middle of the triangle.

I’ll add a diagram here shortly — it will look like a triangle 🙂

As the producer, you might choose to have no sponsors (or, on the other hand, not charge your attendees anything), but most conferences derive revenue from both attendees and sponsors, and so if you’re like most, you serve two masters. With both attendees and sponsors, you have two sets of customers, with totally different, and in some ways conflicting goals.

Don’t have any sponsors or advertising

Having two types of customers at odds with — and yet dependent on one another — makes your life very complicated. My first piece of advice is therefore: don’t have any sponsors at all! How? Easy: just make your attendees pay the full, fair price, without any subsidy from sponsors.

Easier said than done, but not impossible. Some specialitymagazines have little or no advertising, and while the issue price is high, there’s no advertising to distract the reader. Manypodcasts are going with a no-sponsors model as well (although most have sponsors/advertising). There are plenty of conferences without sponsors as well. The advantage is that without advertisers, the business is far less complicated. And I mean WAY LESS COMPLICATED. Those sponsor dollars may seem like easy money; not at all. To earn and sell sponsorship, you need to

define what your sponsorship products are, and how they are to be priced — and doing this takes time and energy away from your primary product, which is serving your audience.

do all the legal, accounting and other work to contact, keep track of, and collect on sponsorship deals — all of which inherently detracts from serving your audience.

and of course, you have to actually fulfill your obligations to sponsors — which necessarily detracts from serving your audience, often quite directly, by devoting precious time and physical space to sponsors.

Most conference producers overestimate sponsorship revenue and underestimate the costs of selling sponsorships and servicing sponsors. For these reasons, most producers would be better off to simply not sell sponsorships at all. So — if you are considering selling sponsorship — be sure to consider the alternative to selling sponsorship: raise your prices.

The full and fair price

You can have a very successful conference business without any sponsors or advertisers, if you can successfully get participants to pay the full and fair price (FFP). What is the FFP? Simply: the FFP is what you would need to charge each participant to make back your costs, plus enough margin so that you end up with a 20% net profit. (I won’t go into the details here, but 20% is an excellent general target for net profitability; if you’re making any less than this, you’re not likely to be in business — or want to be in business — for very long).

Keep in mind that you’re not going to end up with a 20% net profit by simply adding 20% to your own per-person cost (PPC). Using one of my own three-day conferences as an example, let’s say that our cost of hosting each participant is about $1800/person. This is the cost of producing the individual conference (COGS) + a proportional share of our ongoing overhead (SG&A), divided by the number of participants. The FFP would therefore have been in the range of $1800+20%+X, where X is enough to cover not just taxes but also the fact that of course some events were less successful, etc. Realistically our FFP would have to have been something like double our PPC, i.e. about $3500.

So, if we were able to get participants to pay $3500 per person, we could have offered the conference without sponsorship. And we tried, but in our case it just didn’t work. The audience that we were serving was relatively cost-sensitive mid-level staff, not senior management, and they just couldn’t stomach the FFP.

In this situation, you have two further choices: 1) don’t offer the product, or 2) find a way to subsidize the price for participants. For conferences, #2 usually leads directly to sponsorship — although there are other lines of business that can bring in revenue (membership, research, sponsored content, consulting, training, job boards/recruiting, etc). Leaving those aside for now, let’s talk about sponsorship.

How to keep everyone from hating you

Again using my own business as an example, we set our full price registration at about the PPC: $1800. After taking into account free passes, discounts and the like, our average registration revenue was about $1000/person. Given that we needed something like $3500/pp to make a real business, that leaves $2500/pp to make up. This is real money: for a 100-person conference, the revenue gap is $250,000. That also shows pretty clearly that our revenue was skewed heavily towards sponsors: in that example of a 100 person conference, we would have collected $100K from participants and $250K from sponsors.

Given that the reason that any conference exists is to serve the audience, the fact that most conferences end up making most of their money from sponsors is a real problem. It’s way too easy to play fast and loose with what you’re offering to sponsors, and end up with everyone up to their eyeballs in advertising, which will suck real bad. Everyone will hate you, go home and tell everyone how much your conference sucked, and (hopefully) not come back. Bad conferences don’t deserve to exist!

That said, it’s not impossible to do sponsorship well, just difficult. I’ll leave the details of how to do sponsorship well for another post; for now, just remember that advertising is a terrible way to fund anything good and real, and that how you earn the right to be in business is how you serve your audience, not your sponsors. Don’t fall into the trap of finding more ways to sell your customers’ time, burying sponsor pitches in the agenda as “content”, and plastering logos on everything. Sooner or later, you will pollute the well, and once the water is tainted, it’s very difficult to lose that taste. More likely, someone else will find a way to sell clean water to your audience.

Why is there no Tinder for conferences?

I’ve been in the conference business for more than 15 years, and in addition to all ways that conferences can be improved so that they don’t suck so much, there is a huge opportunity to improve on the conference experience that most conference producers aren’t fucking up — because they’re not doing at all.

In my experience, the biggest value in most conference experiences is meeting someone that I should meet that I didn’t already know that I should meet. As great as it is to exchange ideas with people that I already know, adding someone new to my network adds value for me not only in the present but into the infinite future.

Who am I going to meet, and how?

I can’t count the number of times that I began my experience at a conference thinking: who am I going to meet, and how? Sometimes I’ve been pleasantly surprised to meet someone interesting, sometimes not. It’s always hugely gratifying when it does happen, and disappointing when it doesn’t.

Some conference organizers make some effort to match people up, perhaps seating newcomers with veterans or small companies with larger ones, or assigning a ‘buddy’ or navigator. These are all fair techniques, but they require a lot of manual labor and don’t accomplish what could and should be done.

Imagine if there was a system that collected a few facts about each participant and made suggested matches, scored by experience, interests, geography, and activity (and/or whatever else). Imagine if this system was integrated into the conference registration process and, upon arrival, the conference app presented you with a list of people that you should consider meeting. Of course, you could also be alerted to the presence of people that you already know, but most interesting would be the people that you don’t already know you should know. The app could even suggest places and times to meet up, and show you what you have in common. If you’re both into craft beer, dev ops, adventure travel, @EO or #FI, you’d have a place to start a real conversation. I’m not discounting the fact that many great conversations happen by way of serendipity, but as facilitators, conveners, organizers, producers, we can do better than only these random meetings.

Why don’t more organizers and producers make the effort to do some sort of matchmaking? Most are overwhelmed and underpaid. Most conferences don’t make enough to pay for the time required to match people up. Or, the producers have lost track of their why — which is to serve the community. The opportunity they are missing out on in huge though. Good enough isn’t good enough. The conference organizer creates value and earns the right to make money by serving the network. The value in any network is in the number of connections in the network. If the organizer increases the number of connections in the network, the conference is worth more to everyone: participants, sponsors, and as a business.

Matchmaking is the killer app for conferences.

As it turns out, event matchmaking systems do exist, and I am an investor in what I believe is the leading platform. It’s called Grip. You should check it out — and whether or not you use a software solution, if you’re a conference organizer, take the time to match up your attendees — they will love you for it.

Am I just super critical? I don’t think so. Conferences are a bit of a paradox: there’s one for ever–y–thing (even conferences!), and people love the idea of connecting with like-minded people, but the actual experience rarely measures up.

Why?

Money is the short answer — but it leads back to why.

Conference organizers often lose sight of the real reason that they are producing the conference, and forget that addressing the real reason is the best way to make money, instead of just trying to make money. What’s the real reason? As with most other businesses, most conferences are started by someone who had a need themselves, who wanted to meet like-minded people, and who couldn’t find the right place to do it — and so they started a conference. (If the real reason is just to make money it’s guaranteed to suck).

What I mean is that the real reason is to serve people like you — people who want to connect with like-minded peers. The product of a conference is this service to a community. To repeat:

The product of a conference is to serve a community.

So why do so many conferences suck? There are a lot of moving parts to a conference. It’s not an easy business, and it’s not a business that most people are familiar with. It’s complicated, and the product isn’t a thing, it’s an experience. Still, it all comes back to the fact that in whatever ways the conference is not serving the community, the conference will suck. If the conference is serving the organizer or the sponsors first, the conference will suck. That may sound simple (it is!) but there are a lot of different ways this suckage can play out. Here are just a few examples:

Crappy venue

Why would anyone want to get on a plane to go sit in a dark basement? Nobody does! Why does this happen so often? Because the producer can’t afford a better venue. Why? Because the producer isn’t charging enough for the conference. Why? Because they think you won’t pay what it actually costs. Why? Because often they’re right! A great conference is not cheap. YGWYPF — if you want free, you’ll get what free gets you. If you complain about the cost and ask for discounts, don’t expect a pleasant setting. If you and your peers are not willing to pay a reasonable price to be part of the conference you think you want to be part of, then the conference probably shouldn’t exist.

Crappy content

I hate that word. What do you mean by “content”? You mean the words the people on stage are saying? If the people on stage aren’t your peers, that’s problem #1. If the people on stage are trying to sell you something, that’s problem #2. If the people on stage are uninformed, inexperienced, uninteresting, incoherent or worse, that’s problem #3. All of these come down to the role of the producer in creating a great agenda. Producers must be wise about speakers. People say they want great speakers, and name-brand speakers can seem to generate interest in a conference, but charismatic speakers do not make a great conference. Charismatic speakers make edutainment, and the value of edutainment usually goes to zero just about as the lights come up. Real value comes from real connections and real conversations.

Room full of zeroes and strangers

Who is in the room? Why are you there? First of all, you are there to meet your peers. Are you there to meet consultants, wanderers, pundits, lobbyists, junior staffers, and vendors? Do you find yourself spending 5-10 minutes making small talk with everyone you meet, only to find that what they do is only marginally relevant to your interests? What if everyone in the room was hand-picked to be certain that they all share a solid common ground? What if you were kindly introduced to several people that you should meet but that you didn’t know that you should meet? Your time is precious, and every conversation you have should be worthwhile.

Up to your eyeballs in advertising

Advertising is a terrible way to fund anything good and real. If the conference is about tomatoes, people who care about tomatoes are the customers, not people who want to sell stuff to people who care about tomatoes. The product is the conference, not the people who care about tomatoes. If the people who care about tomatoes don’t want to pay the actual, real cost of TomatoCon — and they almost certainly won’t want to — there are a few alternatives. 1) Be honest, charge them the real price, if they won’t pay, there’s no reason to have the conference. 2) Charge them what they say they will pay, and go out of business. 3) Introduce some sponsorship into the business model.

Most people don’t want to pay the full cost of a conference, probably because they fail to understand the complexity of the product, and the value that the producer is creating by doing the work that the producer does. This hidden value is the gap between what people think the price should be and what the cost actually is. Most conference producers find that they have to sell at least some, and often quite a lot of sponsorship to make a viable business. The key to not sucking is in the how. It’s easy to fall into selling your customers’ time, burying sponsor pitches in the agenda as “content”, and plastering advertising over everything, including even the name badges. It is possible to do sponsorship well, but the only way not to suck is to serve the community first.

Chicken dinners and cheap wine

How often do you eat chicken and mashed potatoes? Do you buy your wine from the bottom shelf? Do you have dessert with lunch? Every day? Are you insane? Feed people better than you would feed yourself. Food is not an afterthought.

Sitting on your ass all day

Nobody feels good sitting around all day, especially in the dark, especially with a bunch of strangers, especially after a ton of coffee and dessert for lunch. Physical activity is key to our well being. People! Get up and get outside! If you want your conference to not suck, you need to incorporate real physical activity into the agenda. Not a booze cruise. Not a zip-line ride. A walk, a run, a hike, a bicycle ride, some rock climbing, surfing — you name it, as long as it’s actual physical activity. The simpler the better. No team building is necessary. You don’t need guides or helmets. People will love you for it.

A conference is a unique combination of media and hospitality.

Like a magazine, a conference is a three-way relationship between content, participants, and sponsors, with the producer/publisher/organizer in the middle of the triangle. Like a hotel, restaurant, club and an event, a conference is an exercise in experience design. Sometimes I call conferences live media.

Conferences aren’t boring, they’re an amazing opportunity to connect with other people, to form and be part of communities, to interact, learn and grow. The problem is that most conferences suck. If you can get your head around some what I’ve mentioned above, your conference could suck less — it could even be totally awesome!